Luke Miles, Co-founder of Rug.Fun and Mint.Fun
17 May 2024Summary
My guest today is Luke Miles, creator of rug.fun, meme.market, mint.fun, and context.app.
On this episode, Luke and I run through the history of applications he's created on Ethereum and the EVM. We discuss the recent sale of mint.fun to zora, and go in depth on his two latest memecoin related projects, meme.market and rug.fun.
It was a pleasure catching up with Luke who is shipping thought provoking experimental apps and games on the EVM. I hope you enjoy the show.
As always, this show is provided as entertainment and does not constitute legal, financial, or tax advice or any form of endorsement or suggestion. Crypto has risks and you alone are responsible for doing your research and making your own decisions.
Links
- Hosted by @nicholas
- Luke
- rug.fun
- Rug.fun contracts
Transcript
Nicholas: Welcome to Web3 Galaxy Brain. My name is Nicholas. Each week, I sit down with some of the brightest people building Web3 to talk about what they're working on right now. My guest today is Luke Miles, aka WormEmoji, creator of Rug.Fun, Meme.Market, Mint.Fun, and Context.App. On this episode, Luke and I run through the history of applications he's created on Ethereum and the EVM. We discuss the recent sale of Mint.Fun to Zora and go in-depth on his two latest memecoin-related projects, Meme.Market and Rug.Fun. It was a pleasure catching up with Luke, who is shipping thought-provoking experimental apps and games on the EVM. I hope you enjoy the show. As always, this show is provided as entertainment and does not constitute legal, financial, or tax advice or any form of endorsement or suggestion. Crypto has risks, and you alone are responsible for doing your research and making your own decisions. Luke, welcome back to Web3 Galaxy Brain. Thanks for coming to talk about Rug.Fun.
Luke Miles: Yeah, yeah. Thanks for having me. I'm excited to dig into it.
Nicholas: It's been a while. I was looking at, was it Mint.Luke? What's your screenshot website? I remember we talked about it last time. I love that site so much.
Luke Miles: Oh, Mint, or excuse me, Luke.Cat. Mint.Luke.Cat.
Nicholas: Mint.Luke.Cat. All right. If people want to go check out the real Luke lore, this is an awesome, awesome website where you can mint screenshots you've taken. So, there's a bunch of things I want to talk to you about today. First off, you just sold Mint.Fun to Zora. Why sell Mint.Fun?
Luke Miles: Yeah, sure. It's a couple of reasons. So, for those who don't know, Mint.Fun is the best way to discover and mint NFTs online. It's an aggregator of four EVM chains, Ethereum-based Optimism and Zora, and you can see every NFT minting right now from there. I started that along with my team at Context in 2022. And I think like the week it came out, we might have gone on like Web3 Galaxy Rain to talk about it or some Twitter space that Nicholas may have posted, which is great. So, thanks for the support back then. Why sell? You know, I think sometimes with certain projects, I had a lot of fun growing Mint.Fun and making it kind of a well-known space, at least to some people in like our niche of the industry. The like Web3 NFT niche of the industry. But I also kind of felt like I wasn't the right person or even our team wasn't the right team to take that to the next level. And I kind of thought a little bit about how NFTs or like how the NFT market is changing and growing. And even since I started working in it, it's changed so much. I mean, you know, with the blurs and open seas and gems and Zoras and foundations of the world. I think it's an industry that's very much in flux. And I think if you were to ask most people who are in the know what company has been consistently kind of both reinventing itself and pushing itself forward, pushing the space forward, I think a lot of people would say Zora. And I kind of felt like Mint.Fun would do better at a company where they're doing a lot of really interesting stuff to both kind of grow NFTs as a whole. And they just, you know, they're a software company and they make good software. And it's... It felt highly complimentary. And so that was just a thought I had in my head. And then I called, you know, Jacob at Zora and, you know, pretty quickly we were on the same page with that. And I mean, I think there was probably some interest mutually, of course. I don't think it was totally blind, but yeah, we were able to make an agreement. And I'm really happy to have one where, you know, I wasn't super interested in working on Mint.Fun, but I love the product and I think it should exist. And so I think Zora can take it to the next level. And we don't have to shut it down or something like that. So it really feels like a win-win. Yeah.
Nicholas: Yeah. Nice fit for what they're up to as well. And a part that they're not as good at yet, it seems. So a nice complimentary product. I'm curious, though, what is the DNA difference between, I guess, should we call your company Context? That's sort of the long-lived name. Sure, yeah. What's the difference in fit between Context and what Mint.Fun could become and instead what you're focusing on now, like Rugged Off Fun, MeMarket?
Luke Miles: Yeah, I mean, I think it's just, I mean, I don't want to speak for, it's hard for me to say this entirely because, you know, I can't speak for Zora or Jacob or the team over there who I have a lot of respect for all of them. But I think for me, Mint.Fun kind of came out of this curiosity to help people play with crypto in new ways. And I've been, I remain like deeply curious about NFTs in particular. That's what got me into crypto in the first place. But the thing that I kind of feel like Zora maybe has that I don't have or we don't have is kind of both the breadth of the team and the muscle to like actually get NFTs in the hands of a lot of people who may not know about them or like are just encountering them. I think Zora is like actually particularly great at onboarding. I mean, of like of the crypto companies that aren't like fiat on ramps, they are kind of becoming the culture on ramp to crypto. And I think I just at least see that vision a lot more clearly. In terms of like how you could make Mint.Fun a part of a lot of people's discovery experience rather than like, I don't think it was always difficult with Mint.Fun to like build features like, oh, fiat onboarding or like a mobile app or things like that. Both because the team was really small and also because it was just not exactly our strong suit. Like we were more interested in kind of how can we hack these contracts and things like that. And I think. You know, and we can and do show this. I think we do have like an interest in making high quality consumer software. We're not just like nerds looking at smart contracts all day. But I think there was a moment where, you know, Mint.Fun could be growing a lot faster than it was and it just wasn't with our team. And so, again, I feel like there's a good fit there. So, yeah, that's me speaking how I see it. I don't know how, you know, Zora feels about that, but I think that's pretty fair to my experience. Yeah. So, does Contact.
Nicholas: Now own some equity in Zora?
Luke Miles: I don't think I'm allowed to say what the deal is, but yeah, there was consideration. And, you know, we are excited to see what Zora will do with the product. That's what I can say.
Nicholas: Cool. Cool. So, you're supportive of their next steps.
Luke Miles: Yeah, absolutely. Yeah.
Nicholas: Yeah. Do you think that Zora has already won this? I'm kind of thinking of it as like the IPFS NFT meta. Do you think, you know, they've got this iPhone app that just came out. Do you think it's sort of endgame for NFTs in this part of the market with Zora just being completely dominant?
Luke Miles: Hmm. I mean, again, I can't speak for Zora, but, you know, as kind of an observer, I doubt Zora thinks of it as an endgame. And I don't either. And the reason why I say that is, yeah, maybe they have saturation on like our X feed or our, you know, Farcaster feed. And, you know, yeah, they are like clearly the obvious tool. And the tools they make work well. But I think their ambition and, you know, what they're going after is so much bigger than that. And that's why they're doing things like building an iPhone app. You know, they're not just going off of people who are using MetaMask desktop. You know, they are trying to find a catch, a broader net. So, I don't know. Like when you say endgame, it feels like if you define the endgame as, you know, a pretty narrow, like get 20,000 key opinion leaders to want to use their product. Then, sure, I think they've succeeded. But I imagine they have much larger ambitions. Again, it's kind of hard for me to comment on like what they want to do. But I don't know.
Nicholas: As an observer.
Luke Miles: Yeah. But I think I get what you're getting at here. And I think with Zora, they, yeah, if you're going to make a product that where the goal is to make, say, like an NFT edition creation tool, you're going to have to bring something pretty new and compelling to the table because, you know, the stakes are, what exists is pretty good. The bar is high. I mean, I think maybe a good analogy might be, you know, maybe 20 or 25 years ago, there wasn't a lot of great software to make websites. You know, like the tools that a lot of people use today, like Squarespace, weren't around yet. And there was software to make websites, you know, desktop software like Dreamweaver and other applications. I'm kind of dating myself by, you know, how much I don't know about that. But the point is, like, you know, that's a very... It's a very mature field. And if you were to build a software, you know, a suite, like a Squarespace competitor or a Shopify competitor, you know, people are going to ask for a lot of features because the bar is pretty high. And I think what we're seeing really is the industry is getting more mature. And so, you know, the bar is so much higher. You know, in 2021, people's bar was like, I just want to get this on chain, period, because I'm hearing about interesting things happening on chain. There was a lot of software that enabled that because, you know, that is what people were excited about. But I think, you know... What you have to solve after that and where the more interesting thing to build is, well, you know, okay, it's on chain. How do you get distribution? How do you get monetization? How do you get an audience? I think Zora's, you know, creator feeds are really interesting because what Zora effectively did is they gave creators a business model. And that was something that a lot of people were struggling to figure out. Like, how do I make money by putting art on chain? And they kind of presented this highly compelling business model to an audience of people. And so, I kind of think, you know... We're just in the... We're in a second step, right? Where it's not just about getting stuff on chain. or how can I create a mint tool? That's not the hard thing anymore. It's how can you drive value? How can you... Yeah, how can you show something new or different? And I think that's why maybe their view is dominant because we're... It's not about making just a mint on chain anymore.
Nicholas: Yeah, when I say endgame, I'm thinking like, you know, if anything new is to come out, it's likely that it would be built on. Yeah. I think that's probably the top of Zora at this point because it's just... It's right there. It works. And this format, as you say, this kind of product format of the free mints is really great for a certain kind of NFT that has become probably the most popular kind of NFT right now. And was right in the pocket for the Mint.fun feed, but also is kind of maybe a better top of funnel. Like, Mint.fun is kind of a little bit pro tooling. It's like somewhere between pro and like enthusiast, I guess you might say. It's not maybe pro in the way. But it's someone who's actively participating. So, creating things like fiat on-ramping, you know, they're sort of already in the funnel by the time they've found Mint.fun. So, it makes sense as a part of Zora. I can see the synergy.
Luke Miles: Yeah. And again, I don't know if they're going to build it or maybe it's like kind of the opposite, right? Like maybe it's an escape hatch, you know, like, hey, here's like the highly manicured Zora experience. But if you need more different functionality, you could go here. Again, I think work would be made to differentiate there. But that could be one angle that it could be taken. Yeah. Yeah.
Nicholas: Awesome. You dropped Meme Market about a month or two ago. Maybe. Yeah.
Luke Miles: At the end of February. Yeah. Right at the end of February.
Nicholas: So, tell me about the genesis of that product idea. I think it kind of will lead into the Rug Fun stuff.
Luke Miles: Yeah. Sure. So, I think back in like November or December, I probably like a lot of other people started taking Solana Meme Coins more seriously just because it was like, I think at that point in time. One of the most exciting things happening in crypto, specifically Solana Meme Coins, you know, this is before people were talking about Farcaster every day. You and I were both on it, but yeah. Yeah. So, I was kind of thinking about those products in like, in this moment where I was less excited about the future of me specifically working on Mint.Fun. And I've been excited about NFTs kind of ever since. Since I got into crypto. And so, what Meme Market is, is it's a Meme Coin creator, an ERC20 creator with a novel twist that I don't know if it's been tried so much before, which is the only way to buy the Meme Coin, which is like an ERC20 minted on a bonding curve, is by selecting an NFT, like an image to mint as part of your purchase. And the rough idea of that is, I think, kind of twofold, which is the first way I got to that idea, we got to that idea was just thinking, well, you know, Meme Coins like are really powerful ideas, but the ideas aren't usually not in the material of the coin or like kind of on the substance of it. You know, you have a Dogecoin, that's valuable because, you know, Elon might tweet about it or even just the image of the Shiba Inu. Yeah. That creates value. You know, you have Pepe Coins, it's like this image of Pepe, but they don't really, you know, they're not NFTs, they don't point to media. So, that was like idea number one. And then idea number two that led to Meme Market was thinking, well, the other observation I had about Meme Coins at this time was the things that make Meme Coin valuable or the thing that makes it valuable is something to do. And what I mean by something to do, I kind of just mean something to do as a community. You know, a couple of months ago, Dog with Hat, you know, crowdfunded a bunch of money to put their dog on the sphere. You know, Elon fans like talking about dog coin, you know, people might start telegram groups for other coins and just talk about it and meme all day about the coins. And it felt like on some level, this memeing was an organic activity. that kind of, you know, perpetuate the coin and its existence. So, the idea behind Meme Market was, well, could we connect the idea of... Yeah. You know, Meme Coins as like an image to something on chain and have an NFT mint, but also can we give people something to do? so? you can like create NFTs and you can create NFTs as a group importantly. So, you can have a coin and you can create NFTs as a group. And so, we saw a couple of creators use it. It's still around, but ultimately, I guess, I learned a lot or we learned a lot from Meme Market that we kind of used to bring into our next product idea. But I'll just pause there. I know I talked for a couple of minutes straight.
Nicholas: No, that's great. I want to get to how it informed Rug Fun in a second, but I think a lot of people are kind of circling around this idea of... And to me, it's one of the things that I understood immediately about Bitcoin, which is that it mobilizes early adopters to be evangelists of the thing because there's financial gain. I mean, for whatever ideological reasons, but also financial gain can be extracted from getting your friends to buy more Bitcoin. And just generally creating buy side demand for a token in a way that prior technology early adopting really didn't. I mean, if you're the first one to have the Spider-Man game on PS4, maybe you can make a video about it on YouTube, but it's very indirect. Whereas crypto time and time again has this like mobilizing early adopting in a financialized way. And so, I think a lot of people are circling around this thing. and what Meme Market shows to me is like, I see it as a very clear evolution from your Mint Fund stuff where you're seeing all these 1155s. Or 721, but editions, NFTs. And how can we mobilize the fan base of a high liquidity ERC20 to use their creativity to further like pump the shared ERC20, but each with their own unique artwork intervention. And I think Meme Market was quite early in sort of perceiving that and manifesting it in a product. So, very cool product. I'm curious, have you seen another version of this I've seen recently? is the higher token? We've had a lot of people use the higher token on FarCaster in general and how they're using Zora protocol rewards. So, members of the community as far as I understand it, are denominating NFTs on Zora in higher token. And then the Zora interface I believe will even let you pay in ETH or some other token that you already have in your wallet. But effectively it means that when you go to buy a meme created by a member of this higher community, you're creating buy side pressure on the AMMs for that token. So, everybody who wants higher token to pump can create their own Zora art. and the ones that are successful ultimately have a positive effect on the price of the token, which is a kind of like ad hoc version, like composably with some new Zora stuff that's come out in the months since meme market. Yeah, so I'm curious if you've seen that and if you think it's related in a way.
Luke Miles: I did see that. It came out, I think a couple of weeks or a month or so after meme market did. It's really interesting. I didn't read the contracts. Do you know how Zora takes their feed? Do they denominate it in higher as well?
Nicholas: That I'm not sure about. I doubt it.
Luke Miles: I think that would be interesting too if Zora would be aligned their bags, if they have some sort of higher treasury or if they're selling it or something like that. The Bitcoin analogy is also interesting because sometimes people in early Bitcoin would be like, hey, you can pay for things in Bitcoin. And I always thought, what? You'd want to sell Bitcoin? Even at the time, not knowing what it would be worth later, more just like, I thought you liked this thing and you want to accumulate it. Why would you sell it? Anyhow. Yeah, it's funny.
Nicholas: It's funny how the narratives evolve and are so often. we don't get what we're promised, but we get something else.
Luke Miles: Yeah, yeah.
Nicholas: It's been interesting to see. And obviously the other player in the room on this kind of thing is Pump.Fun. Speaking of Solana and Blast, maybe, I don't know how familiar you are with that, but would you dare to explain it to listeners who don't know Pump.Fun?
Luke Miles: Yeah, okay. I've used it a bit. I saw it kind of after we started building meme market. And so it had this like chaotic thing that I couldn't fully wrap my head around until I tried it, which I think is probably just true about that product. Pump.Fun is, so it's designed like an image board, like 4chan. And if you've used an image board, most image boards have this view that Pump.Fun defaults to, which is like a view of all of the like topics on the board with like a picture and text describing it. And, but instead of being like forum threads, like how they are in 4chan or sites like that, they are all meme coins. And it's a game where you can deposit liquidity in a meme coin. I think they're sold on a bonding curve. So you can, they go up and down. And then once the bonding curve reaches some amount of liquidity, I think in the order of like $12,000.
Nicholas: 69K?
Luke Miles: Oh, 69K.
Nicholas: I think it's 69K, then $12,000. Yeah. Yeah.
Luke Miles: Okay. Yeah. And once it reaches some threshold, the liquidity then, then ejects the Pump.Fun platform and goes on an AMM. But I think, you know, what it's most known for is the kind of trademark homepage that feels very chaotic because there's a lot of animation and motion. Every time there's a trade, the page kind of like shakes and jolts at you and explain. Yeah, it's very crazy. It's very slot machine like, and it's cool. Get a lot of credit. It is cool. It is cool.
Nicholas: I really liked the Chan design. I think that was pretty innovative. I didn't see anybody do that. And then to me, as far as I know, they're the first ones to pioneer this bonding curve. I mean, maybe it's been done somewhere else and I'm just not aware of it, but taking a bonding curve and transforming it into an AMM, once it reaches a certain threshold seems like one of the more interesting mechanisms for sort of making relevant to the bonding curve. So that's not all because I think the problem of the raw bonding curve designs is, and correct me if you disagree, but it sort of encourages you to just play a very raw version of chicken where we're all just trying to get out at all time high and there is no, no other end game for the bonding curve. So there's lots of products, friend tech, Dracula, many other things that are using bonding curves. But the limitation of the naive implementation of the bonding curve is that there really is nowhere else to go except the bonding curve. So where, you know, what, where do we go from here? Even uni socks, I guess you could say, although it has more cultural cache and so people are hanging onto the longer. So it's a more long time horizon game. This transition from Bonnie curve to to AMM, seems like to me, I attribute that to pump dot fun. I don't know if there's any other references in your mind. But I thought that was very, very smart. Yeah.
Luke Miles: I think the interesting insight here too is and I learned this by building me market actually bonding curves are pretty boring in a lot of ways. Like they, the price can go up and down quickly on a bonding curve, but there's not the same rush of volatility and kind of the, the reason why there's more volatility on AMM, but the reason why there's more volatility on AMM is because like you kind of have to find people willing to provide liquidity at certain amounts. So there's like a, there's kind of like asymmetric, like the, the term is escaping me, but basically there's like pockets of liquidity that can kind of cause prices to like jump quickly or move or not move. And so AMMs would have just way more things that can happen with the price. Whereas bonding curves are kind of like, yeah, I mean it'll, maybe it'll just get too expensive for people to want to care about or it'll go down or it'll go up slowly. And I think AMMs, AMMs are great. I mean, even the products you mentioned that use it, I think it can make sense for those products. But yeah, I think that was a pretty cool innovation because what I was going to say is pumped up. Fine. It goes from like kind of predictable, like, Hey, we're building a community, get on board to then, you know, volatile, like, okay, like we're throwing you out the plane, you know, good luck. Like hope you go to the moon, that sort of thing. Yeah.
Nicholas: I think it's very nice also because a lot of the problem and I, I've worked on a little bit of stuff with bonding curves as well. And they, they, they are not very composable with the ecosystem. Whereas the advantage of the ERC 20 liquidity in an AMM is it's just so composable. It's on every single platform and everybody's already configured to use it. You have like, I mean, mint of talk of mint dot fund. It's like a mint dot fund times a million in terms of compatibility with existing front ends that are out there.
Luke Miles: Um, and that gives an incentive for code posability, right? Hmm.
Nicholas: When there's arbitrage, that gives it, yes, it does. But if you, if you're still, if you're just locked into the, the bonding curve design permanently, then you kind of, you just are, even if it's an ERC 20, you're denominated, you're sort of incompatible. Like you're not going to be able to trade it in rainbow directly or other, other things. So it's right. Right. But you think of it in terms of, in terms of the arbitrage incentivizing composability that people want to make more, that almost makes me think of like friend pet and the way people are making other interfaces for friend pet, maybe because it is like this hyper-composable ERC 20, uh, underlying.
Luke Miles: Well, what I really meant by that is like, a lot of cases where bonding curves make the most sense, they're actually non-composable for other reasons. Like there's unlimited supply or that makes sense for the purpose of buying it to do this. And it's not like there's a fixed supply need to gamble and there's opportunities for price mismatch to exist because it's more just like, or if there is arbitrage, it gets resolved very quickly. Whereas, you know, in AMMs, you might have several different trading venues where, you know, ETH USDC can exist and people will fight to make them composable. If there's a dollar to pick up, they'll pick it up off the ground in general.
Nicholas: So I guess no better time. Tell me about rug.fun. What is it and how does it work?
Luke Miles: Yeah, sure. Rug.fun is a competitive meme coin launcher. it's the idea is what if you could launch a meme coin and have it be full PVP, a full chaos. Um, it's the way that it is structured. is, is it, we run 24 hour games where meme coins fight for liquidity and status. There is a 12 hour period where there are coins selected that are the competitors, the kind of a qualifications period. 10 coins are selected out of that round.
Nicholas: Then I'm going to make you go real slow. So in the qualification period, anybody can create a coin that basically upload a picture, give it a name. And, and it's like a free for all anybody at all can submit. It's free to submit, or you have to hold some of the airdrop coin to submit.
Luke Miles: It's completely free to submit, but you have to buy some denominal amount or like some nominal amount. Uh, I think you can buy it as like little as you can buy anything really.
Nicholas: So I'm locking like a few bucks in this contract to, to temporarily to create my own candidate meme coin. And then at the end of the phase, only the top 10 make it out and the rest are just refunded. I can just reclaim back whatever I purchased.
Luke Miles: Correct. Yeah. So there's two stages to the game. The first stage you want your co. anyone can make a coin. Uh, in this game, we just ran. hundreds of points were created. The goal was to be in the top 10, the coins that didn't make it in the top 10 were eligible for a full refund. Uh, there was, yeah, you didn't lose anything except for maybe the small amount of gas you may have spent making the coin.
Nicholas: Um, and then base, right?
Luke Miles: Yeah, it's on base. So we're talking pennies. Yeah. If, if, if that, um, that's, that's phase one. Um, that's 12 hours. Then there's a second 12 hour phase. in the second 12 hour phase, the goal, and this is where it gets more interesting. The goal is to hold the token in the game with the most liquidity and liquidity is from people buying the token or the token with the least amount of liquidity.
Nicholas: So same mechanism of buying in as in the prior phase, but now there's only 10 left. Nothing's changed in terms of the buying in. Yeah.
Luke Miles: So you can kind of think of it more as like a token presale or something like that where you can buy the token for a fixed amount of ETH. It's just like kind of one to one for the whole game. And so it's kind of just a competition of who can provide liquidity. And yeah, so you want to have the first coin in the game or the coin in the game with the least amount of liquidity. And what I mean by you want to have it, um, this is where the title of the product comes in. Rug dot fun. There's a winner and the loser. The two tokens I mentioned tokens, you know, second place through ninth place will have all the liquidity stolen from them and deposited split in half and deposited on top of the liquidity from token number one and token number 10. There's also trading fees that apply, um, that also kind of go into this prize pool that the winner and the lowest, which is also a winner, uh, get at the end of the game.
Nicholas: Okay. So I have two questions. I want to, don't want to forget the taxes because I was a little bit confused about that, but it's interesting that the loser, so you have this great, uh, 180 IQ or 80 IQ meme, uh, distribution and the tokens are moving around on it based on how much liquidity is provided or how much presale liquidity, uh, is provided to each of them. I'm interested in, in the choice to make the least, uh, funded token also a winner. Uh, it's not obvious to me and you, I mean, it's a strange thing. You're kind of, you're encouraging people in order to win with, for that token, they need to remove as much liquidity as possible. It's a interesting mechanic. Uh, I'm curious how you came up with that. If you think it's, it's working or, uh, cause obviously it makes sense. the one that people put the most Ethan to, okay, that's one of the winners. Um, but the other side of the equation is the one that's, uh, I don't know if I've fully grokked the mechanics socially of what it does.
Luke Miles: Well, uh, if you have, if you have a list of 10 tokens and one of them has more liquidity than the others, like, if you list of first place through 10th place, and the first one has five ETH, and then the second one is like two ETH. And the last one has maybe 0.1 ETH. You might look at that and say, oh, wow, this is a pretty easy dynamic. I might just go pick the winner and that's fine. I think that, I don't think it's very interesting. The, the other thing is kind of the griefing element, which is, oh, okay. The top corner is five ETH. Well then right when the game ends, I'm going to put in 10 ETH and steal all the liquidity. And so, that also wouldn't be that interesting. That's not to say that it's impossible to do something like that with a rug dot fund. But the idea that we're trying to get at and you know, are experimenting is by making the loser get a reward. What that does is it makes it kind of interesting because you actually have pools of liquidity that are going up as people are depositing in the game, but then people trying to swap out of them to own the loser. I think it also means that because the loser kind of definitionally will have the lowest amount of liquidity and the lowest amount of holders, or at least again, the lowest amount of liquidity, it means that there is kind of an investment sense, maybe investments, the wrong word, but like kind of in a speculation sense
Nicholas: the highest
Luke Miles: amount of upside by choosing the loser, because you're going to get half of tokens two through nine deposited as liquidity. That's backing that coin. So that coin has more, more of a chance of going up. It's an interesting dynamic that we thought would just make the game feel chaotic. And I also think it prevents griefing. And I also think it, it kind of separates, it does something a little weird that I don't think a lot of products are trying, which is the mechanic almost becomes more important than the token on some level. And I don't think that's how it should be forever or like how it will always be with rug dot fund. But what it means, is the experience of picking the worst coin is maybe where the emotional attachment one would have to the coin would come from rather than, Oh, I like this picture. Like the idea that you, you were smart enough to figure out the loser might help you, you know, get to the right coin. Someone pointed out to me, I think on warp cast, Hey, you know, maybe this would mean that the coins with the lowest amount won't strictly be the worst by any kind of normal filtering mechanism. They'll just kind of be the ones that, you know, won or lost this game of hot potato. And I don't think the whole game is necessarily a hot potato, but by rewarding the loser, there's something interesting there. And also by rewarding the winner, it means like, well, if you don't want to try to do that, maybe you can just build consensus around something else. And in either case, the interesting thing that happens is people are having to kind of work with a collective of people to make decisions about what's valuable, whether you're trying to get the lowest liquidity coin or the highest.
Nicholas: Yeah. It's interesting because, I mean, I'm just thinking you could buy a little bit of all of the 10 contenders and you will get the, you will be the, you, I mean, you'll be in the winner and the loser, but being in the winner when there's so much liquidity is not as interesting, but you'll be a greater proportion of the loser than of the winner. If you spread the same bet across all 10, but you also can be griefed right at the end. You could have someone dump a bunch of ETH into it, but at, at their, at the risk of losing, they will lose everything if they do that. You know, you like, you can imagine being a big holder of the second most loser and then dumping ETH in the biggest loser, but you lose it all. That is the, the sort of spiciness of the game is two through nine lose a hundred percent. They don't get any tokens in anything.
Luke Miles: Well, you do get the token. That's actually one thing. So every time you send ETH in a rug fund, you get back ERC 20 tokens that you can do whatever you want with. There is a restriction on them for putting them in. You want to swap liquidity pools just during the game. And that's mostly just for kind of making the game work on a technical level. But the idea is like you own these ERC 20 tokens. They just don't have liquidity. So if you wanted to go say, start a liquidity pool after the game's over, I mean that nothing would really stop that. And even during the game that we just had, people were trading these on DEXs and stuff, which I think is awesome. I think that if people want to kind of treat these tokens as just tokens, you can do whatever you want with, that's great. But again, you're competing for your token to have liquidity, which is the fun part.
Nicholas: Okay. Okay. So you don't, the ETH that is backing all the tokens gets rugged, but the tokens, you still hold the tokens. There's just no LP automatic LP at the end of the game. Okay. So if I, if I have token number two, I retain my token number two, I get the presale works. It's just that the, the ultimately there's no LP of an AMM back in that token. Okay.
Luke Miles: And I think that's great because, you know, sometimes people get tricked by developers and stuff and they get rugged, but when you want to buy, buy a token on rugged up fund, you have to click a box saying that, you know, you might get rugged. And so at least we're asking for permission before we maybe argue, or, I say we, it's the game. I mean, it's the market. Yeah. I'm not touching the winners.
Nicholas: That's it. How do taxes work?
Luke Miles: Yeah. So we're still iterating on this. And I think if we do, or when we do another game, this is the thing we're most likely to change exactly how this works. But the way taxes work is we also wanted to reward, being correct about the market early. And so the way that we do this is as the game progresses. there's your swaps, no longer become like one ETH to one token. There's a tax taken out of it. So let's say there's a 5% tax. Now 5% of your trade is actually being set aside and being put into what we call the rug pool which is a pool of ETH that also gets split between the two winners of the game. That pool is in addition to the liquidity that they're stealing from tokens two through nine, the midwit pool.
Nicholas: So in practice, this means that less. when you make a swap as the game progresses, when you swap between tokens, because the swapping that you're talking about is swapping between your sort of. your liquidity is locked in the 10 tokens in the contract and you can swap between them, but you can't exit during the gameplay of phase two. Is that right?
Luke Miles: Yeah, that's correct.
Nicholas: So this is a tax on those swaps between the tokens and as the game progresses. Yeah. And new purchases. Okay. So as the game progresses, the pool, but all of the liquidity is destined to be allocated to the winner or the loser, right? They're like 50/50 all the ETH in the contract. So what is the tax? I guess it diminishes how much you're able to swap for during the gameplay. So if you make late stage, choices, you're being punished and your move is not allocating as much liquidity and moving the needle as much for the token you're swapping into. So it sort of punishes you for that. I guess that's the main thing, but ultimately the liquidity goes to the same place. All liquidity goes to the same place.
Luke Miles: That's right. A hundred percent of the user liquidity of the game gets locked into a uni liquidity pool. We don't take any fees on ETH that people put in the game. The way that we make money is we, we collect the liquidity fees from the pool after it started, but we don't, but we it's locked up permanently. And so that is just liquidity that's now used for that token.
Nicholas: That's like a 1% or 0.5%, something like that.
Luke Miles: It's a 1% pool. Um, and you know, whatever fees we get on that are kind of market driven. Cause you know, people could provide liquidity on a lower fee tier or something like that. Yeah.
Nicholas: Right. Right. If the thing is actually super popular, other, other, uh, other LPs could emerge. Um, there's also the airdrop token, um, which maybe that's just for the first round. Yeah.
Luke Miles: The idea behind the airdrop token is we wanted a lot of people to hear about rug fund. So what we did was, um, again, all the tokens in the game are backed by ETH because of this whole concept of liquidity. So what we do is we set aside some ETH for, I think, you know, 50,000 people to come and try to play the game. And so when they went to the website, they were able to claim a few dollars worth of this airdrop token. Now they weren't able to sell it directly because it's locked in the game. But you know, they could swap it to a token. Usually they, they swapped it to a token that say got refunded. They'd be able to refund at that point. But, uh, the idea was, yeah, kind of just like a, a go to market strategy where, Hey, we'll give you a few bucks to try this game and swap stuff around. And the awesome thing about base is you can give people a few bucks and they can try stuff without all that money being dominated by gas or something. Yeah, totally.
Nicholas: Although for way main net lately, you can maybe even be doing it on main net these days, but for sure, basis is much better. It's weird. But, uh, and then the airdrop token was also like a hard coded as one of the top 10 selected in the first round or not even, no, we didn't hard code that. Um, so I mean, it just happened that most people left it in there. So it ended up being in the, in the running. Yeah, exactly.
Luke Miles: Um, and we kind of figured that that was likely to happen considering, you know, we were more or less putting a lot of buy pressure on it. Um, and it was up to the players to then go swap it. But I mean, what really surprised us is we only put, I think less than 32 ETH in, in funding. I don't even think all the airdrop got claimed. Um, and you know, hundreds and hundreds of ETH of liquidity came from people wanting to play the game. And so still kind of do our full retrospective on like how and why that happened. But it's really cool to see that level of support and ultimately like the, the subsidized play was really a drop in the bucket of what we saw. Yeah.
Nicholas: Yeah. It's a 492,000 in the prize pool. I guess that's, that's a hundred percent of the liquidity that was in there.
Luke Miles: Um, so yeah, that was you're right. So it was 492,000 in the prize pool. Um, but I think the airdrop token raised about $3.5 million in liquidity. And so what happened at the end of the game is for the airdrop token, which won number one, um, liquidity, it raised, which the 3.5 million plus half of the prize pool, which is, you know, 200 something thousand dollars, that entire sum got deposited into a uni V3 pool for airdrop. And in the case of, you know, uh, the 10th place token, the same thing happened, but with much lower liquidity because of his 10th place, but it went 50% of the pool. Yeah. Right.
Nicholas: So this means that the people put $3.5 million in buying into the airdrop token, and then it won an additional 229,000 from the prize pool.
Luke Miles: Yeah, that's right.
Nicholas: Amazing. So, so the number one token really like ran away with it. Yeah.
Luke Miles: Interesting. And I think, you know, it was, yeah, a pretty low amount, you know, I think there was way less than 250,000 put in liquidity and token number 10. And so, you know, if you were a holder of that at the end of the game, I think that was a fun outcome for you. Yeah.
Nicholas: I think I'm seeing here, at least on the current, what's the data that's on the site right now is $26,200 in the 10th place token. Um, but actually the ninth place token, it has only $200 more.
Luke Miles: Um, it came down to the wire. Yeah.
Nicholas: Token above that is like $20 more or something or $50 more, something like that. So very, very close race for, for the bottom. So that's interesting. And I think it'll be interesting in the next round. If you don't have the airdrop token, it'd be completely different what the outcome is.
Luke Miles: Yeah. We have a couple of fun ideas for next round, but you know, trying to understand what we can, how we can make the game make more sense and be more fun is top of mind.
Nicholas: Super cool. Uh, I'm so curious what the conversations are like inside your org. How many people are working on this project right now?
Luke Miles: We are. Eight people. Eight people.
Nicholas: And is it like, what's the creative conversation? Like, I mean, these are kind of unexplored territories. It's not, it's, I feel it's like there's maybe in our circle on, especially on Twitter, I guess there's people who are thinking about this a lot, but it's actually a very niche thing in the world to have even opinions or ideas. Does not think about this design space. Um, I don't know if there's any, anything you can say about what it's like kind of developing these things for people who aren't in the room, but it's fascinating to me. Yeah.
Luke Miles: Well, the first thing I'd say is it's truly a team. Team effort. Um, I am really grateful to work with people on my team who, um, you know, kind of across the board, uh, on product design and kind of, I had like kind of some fun ideas or like how we can make this work. But I said, and it has to have a midway curve and then actually making that and make it make sense was a huge collaboration. So just having a product designer, I'm not a product designer. So having that on the team was, um, Josh running a team with that and then having, you know, brand design and, you know, comms, like even things that I'm saying. these things, because when I, before I was kind of doing this stuff, I didn't really think about like having brand or comms or making stuff like this work, but like we did a really good job getting the word out this week, which I think to kind of make crypto games work, you have to like know how to talk to people. And then of course, you know, all the engineering that went into it, I mentioned this last only just because, you know, that's the normal thing people say, and it is probably the hardest part, still the engineering, um, making it make sense. Um, and I'm really lucky to work with, with people on the smart contract engineering side and people on the, like kind of full stack, you know, front end side who can kind of take some of my like insane, what if we did that? And actually, again, make it make sense. Cause I think that's a big part of it. It doesn't always make sense. Uh, you know, it's sometimes, what if we do this? And then there's a process where you kind of have to go test that and test your assumptions. And that sometimes involves writing codes and that involves just mocking up the design. Um, it kind of looks, it looks different for every project, but men find came together in like two and a half or excuse me, not men. Fine. Um, rug fund came together in about, I think two and a half weeks, um, from kind of idea to maybe three weeks. Yeah. From idea to shipping, including like getting a speedy contract audit and everything like that.
Nicholas: All the way to shipping. That's impressive. Yeah. Did you, uh, run like a test that version of it at all? Or did you try it? Yeah.
Luke Miles: Internally we did. Yeah. Um, w the, the app is, there's like a lot of things that kind of have to go, right. Cause it's, it's a game, there's different stages. So we wanted to really make sure that like when the game ended, I don't know if you saw this or if you were tuned in at the time, but the tokens like fell through the screen with like a animated rug animation. The replay.
Nicholas: Yeah.
Luke Miles: Yeah. Um, so just making all that. Yeah. We had a test that version, but we only tested it inside of our team. We didn't really tell anyone about it before we shipped it. Not because even we're so secretive, but just because we were really heads down working on it. And so it was really cool yesterday to see these things just actually work. And I guess, I give my, my team a lot of credit, um, because it, it takes a lot of rigor and effort to kind of pull these things off in a way that just feels seamless and consistent, even just like when the game finished, um, we almost instantly in the liquidity made it in the unit swap, uh, liquidity pools and everything like that. And there was some confusion. if it had, because some of the front ends for the decks tools, not literally decks tools, but some of the decks tooling out there, um, just was like slow and couldn't fathom that much equity moving. Right away. And so having to like communicate to people, yes, liquidity is there. So anyway, it's just, that's, that's what I can say about it, which is just, you know, um, and I'm an, I'm a software engineer too. So I, I wrote code to contribute as well. So it just, it really took everyone and I couldn't have done it without a team of people that are really good at this. Yeah.
Nicholas: Yeah. And it's interesting that you went, um, above and beyond with like some of the animations and things that you're saying for such a short sprint project that you, you know, cause some, this, this one thing that I'm noticing in a lot of projects is that actually like, uh, you need the mechanism to work, especially the on-chain mechanism to really function, but often you can actually sacrifice a lot of the UI stuff.
Luke Miles: Um, and it'll still, this was sacrificing a lot of UI. If you look at me market, there's a lot more polished than that. Uh, this is us going a little bit faster. Yeah. That's great. That's great. Interrupted your question.
Nicholas: No, no, no, no. Three weeks is very impressive. You were saying also that like the engineering remains kind of the hard part, but it, you know, it, it really is like a, like a stool or something like you can't, three legs. You can't, it needs a product design that works. It needs a mechanism. That's interesting. And it needs the engineering that, or even maybe product design and mechanism are the same thing, sort of conveying the mechanism visually. Uh, it needs marketing to get people to know about it. And it obviously needs the engineering to make it actually function. And it's not trivial to get all three, but it is, you do see lots of teams that have one of three or maybe two of three. Uh, but it's cool. Like rug fun came together very fast in terms of publicity as well. I, I saw it one day and it was launched the next day, basically.
Luke Miles: Yeah. I also, one thing I wanted to say too, is like, we didn't launch chat in rug fun, I think until 10 hours into the game, uh, we just decided we would just ship it after we launched. And we, we just did. And I was kind of like, you know, helping someone on the team was in a different time zone. So like needed design help. And I'm like jumping in, can we do this? And then it all, it all came together. But yeah, just, uh, sometimes you can have a forcing, forcing function of, uh, Hey, the game's live now, let's try to get, get something in. Um, yeah.
Nicholas: The tagline don't overthink it. Is that, is that a tagline?
Luke Miles: Yeah. Don't overthink it. It's a, you know, it's like a mid curve meme, you know, the, the guy in the middle is mad because he has a million reasons, uh, why, why you're wrong. How, but, but it turns out he's wrong. Totally.
Nicholas: Um, how does MEV play into the game? Like at the last minute does, is it, uh, yeah. how can I think about that? Yeah.
Luke Miles: MEV is a little weird to think about on these layer two chains. It, it does exist, um, MEV, but it's not the classical, like kind of what you see in Ethereum because, um, there's no decentralized sequencers yet. So there's not a, like a market for, you know, ordering transactions or things like that, like flashbots. Um, but that's not to say, I know you probably just mean MEV in the sense of like, what is front running and things like that look like.
Nicholas: Or just like, what is the last block? Look like, or, you know, how might you think about it? Yeah.
Luke Miles: I mean, yeah. So there's a lot of, um, we've gamed it out internally and essentially you run into situations where, you know, someone could come and deposit a lot of liquidity in the last moment. Um, it gets really risky if more than one person is trying to do a strategy to front run, because usually the strategies we kind of came up with when we were gaming, like how we could break it involve like, well you could do this thing and you could maybe win, you know, like you could probably make a 30% profit, but if someone else tries to do the same thing, you'll lose everything. And I'm not, by no means am I saying the mechanism is perfect. I think the mechanism will evolve as we kind of talk to the community and get more ideas of how we can improve it. But the, the real thing that I think I'm finding is like, well, I think it was sufficiently expensive to make it work. Even though we were kind of gaming out what we thought and to, um, it felt like at least in this very, very early stage, you know, if you call a product rug fun, if you make click, click, make people click disclaimers that they're going to lose all their money. Um, maybe it's okay to like, kind of just see what's possible. Obviously I'm glad that no substantial MEV happened or, you know, a rug happened. But my point is mostly just, um, I think this is an experimental product that's presented as such. And so we, we, we were happy with the level of safety going into it, kind of just having gamed it out. And we thought that it would be unlikely. At least in the first game, but it's something we're really aware of. And I think the lighthearted nature of kind of just calling it a rug to up front, I think is also kind of a nice way to be able to try some of these things. Um, but yeah, it's something I definitely care a lot about. And I think again, we will evolve the mechanism to kind of become more resistant to MEV. And we have some ideas about that.
Nicholas: Yeah. Is the, I mean, obviously the centralized sequence or base and such, but is it, um, transparent? Like, can you see the mem pool?
Luke Miles: Yeah. So there's not a mem pool in the same way. Right. So, um, yeah, like this even kind of happened on mental phone. We used to show pending transactions that doesn't really exist because, um, again, there's no market for people trying to broadcast and relay transactions. Like there is on a theory. And it's just, I don't know the exact mechanism, but I think more or less just email.
Nicholas: Yeah.
Luke Miles: Yeah.
Nicholas: You just sign your transaction, email it to Jesse and it's on chain.
Luke Miles: I think there have been instances. I think I read about like friend tech where, like there are some RPC nodes that were one way or another, we're like leaking unconfirmed transactions, but that sounded more like a bug, you know, with Ethereum, the mem pool, that is kind of an inherent part of how Ethereum works. Like it's a peer to peer network where transactions get broadcast. There's no such thing of that on layer twos, but I mean, there is kind of MEV in the broadest sense of many angles.
Nicholas: Like in general, they're the idea is that they're sequencing them in the order they receive them to our knowledge.
Luke Miles: Yeah. To our knowledge. Right. Yeah, exactly. We, we don't know how they, they sequence it. And if Coinbase got on this, maybe they'd, they would do that. But I don't think that there's evidence to support that they've been reordering transactions.
Nicholas: Cause no, I don't think so.
Luke Miles: Yeah.
Nicholas: I don't think they want to do that right now, but I guess from a censorship resistance and sort of at least why I, and I think many people, you maybe also are here. Some of these issues are like in the longterm, pretty important. We don't really want to have such like prominent central points of failure in the core infrastructure, but for a game, and this experimental for the things that are happening on base right now, it's, it's, it's fine. I kind of treat base. Like I treat polygon at this stage. It's like, you know, it works. It does. You don't, you don't generally lose all your tokens or, you know, the, the chain, it resolves eventually and it's, it's fine, but it's not the same. It's not the same product as Ethereum main net, of course.
Luke Miles: Right. Yeah. I mean, I think I really trust the team at Coinbase, but I would like to get to a world where the sequence is decentralized. And I don't mean to like convey any sort of blase, a attitude towards security or anything. It was really important for us to get it audited for us to kind of work through what it meant for us, what it meant for the, yeah, the game, the sort of exploits MEV was top of mind, but I, we were happy with kind of where we landed and to ship the first game. Yeah.
Nicholas: I'm curious, why did you choose base? There are a bunch of other L2s out there, even L3s. What was it about base that felt right?
Luke Miles: I think it was just kind of a matter of familiarity for us and the team. We, we'd been building on base for awhile. I don't really have a great reason other than like, it's the layer two with like kind of the most well-known on off ramps in the US. And I think that's more of a, maybe a function of brand than even functionality. I think like they just kind of have like this, like, okay, if you're on Coinbase, you can go to base really fast. And yeah, I mean, Jesse and the team over there are really helpful and great, but honestly we kind of, we moved so quickly. We didn't really spend any time thinking about, about what layer two to build on. So maybe that's just a testament to base. Like they probably want to be a little invisible. Yeah. Yeah.
Nicholas: It's a, it seems like a default for a lot of people, although interestingly pumped up fun is on blast and Solana, not not not base yet. Yep. What do you think of this like competitive setup? Is that something that, I mean, I think for a long time I've been thinking about. other people have been thinking about games where you bring or participate in some kind of like a community where the community plays a game to, to see against other communities together. And I think this game is one of the more successful versions of that, that I've seen where, I mean, even the communities can be imported from existing tokens and recreated or splinter communities of existing communities, which seems like a pretty successful strategy for future iterations of the game, I imagine, or they can be entirely new things where we decide we're going to create a new community. But this competitive thing feels, I mean, if you look at something like, I don't know, party Dow, which has a certain perspective on multiplayer versus this, this feels to me very like of the moment. right now, it's not, it's not a long-term game. It's a short-term game we're playing, but it allows for some kind of competitive and collaborative dynamics. I'm curious if that's something you're interested in continuing to experiment with, or if you have more ideas about that. Yeah.
Luke Miles: I think that competitive dynamics are a really fun way to create adversity that groups can then overcome. I think that's a big thing of how I view meme coins, like, you know, sitting around and agreeing that we're going to, pump the coin and nobody sell it. That is like a form of bonding with like complete strangers and overcoming adversity. And so I'm interested in this. You're also, you're kind of asking me two questions, which is like, how do I view kind of coordination or competition in these games? And then maybe the second one is, and is this with groups of strangers or, you know, more established people? What, what types of like durations of these relationships are we trying to create? That's what you're getting at here. And I think right now, I am interested in kind of helping people assemble these like teams and bonds on a quick basis, but that's not to say that it couldn't be like longterm, like ideally we can find a way for these coins, even the ones that launched today to live on and have their own communities. And actually like, you know, this is kind of a somewhat in response to iterating on what didn't work on meme market. And so what I mean by that is like, I think me market w it was very focused on, okay, you have your community now, like here's a place where you can all create together where rugged up fun is kind of taking that from an opposite perspective, which is like, how do you find your community? How can you get a bunch of strangers to agree on something and like build consensus? And so I think that's the question I'm interested in asking right now, but I want to get to the, like, how can you build these like longterm community places to collaborate? And I'm saying collaborate. And you're at, you use the word competition, but I just think that that's because collaborating to compete is kind of what every collaborative crypto product is about. Even if you look at party or others.
Nicholas: Yeah. It's not PVP it's TVT or something. It's like team play. It's yeah. We've, I'm curious. Yeah. But, uh, you, you say that it sort of is informed. Is it the phase one part that is really the correction of what you observed as a failure in me market? Like the team formation piece, is that what solves this finding your tribe? or is it something else in the design?
Luke Miles: I think it's, I think it's the game that solves finding the tribe. Like it's kind of the whole thing. I mean, yeah, the fact that there's like this stage where like you're in kind of this lobby and anyone can just throw an idea out and people can point at it and say, yeah, I want to be in that. I think that's definitely like kind of literally like finding your tribe, but even phase two, when the tokens have to compete for, you know, either top or bottom, there's this moment. And this is what I mean by adversity, where you have to actually collaborate a movement in one way or the other. And so that kind of feels like, and I think, you know, especially if you're trying to get the lowest token, maybe that feels like very much, Hey, every man for himself, I don't want to collaborate with you. I want to just compete with you. But I think the fact that there's the top token, I think there's also, you know, when we, when we launched chat, people started sharing strategies of how they want to play the game. Maybe the strategies are adversarial, or maybe there's like, again, mutually assured, you know, success. So I think that writing that line, there's a lot of tension and drama. And I think that's what I'm excited about unlocking that because that's the core of most fun group interactions, you know, even if you're on a soccer team and the goal is to win the soccer game, there's a lot of tension and drama to get there.
Nicholas: Yeah, absolutely. Um, well, I'm curious in a journey from context through to this product. You mentioned the importance of the team and building this and being able to do it so quickly and effectively across all these different domains. I'm curious if you have any observations of building a team that is capable of shipping something like this in three weeks, things that you've learned in the last two, three years you've been working in this stuff. How did you build this team and what makes a good team, a team that's capable to do something like this?
Luke Miles: Wow. Yeah. I wasn't expecting that question. Yeah. I mean, it's, you know, it's not one thing. I think it's, I think one way that I lead my team is I try to make everyone feel like they can make decisions. And I really mean that like when I ask people to work on things, I oftentimes want them to feel like they're empowered to figure out the answer. and that doesn't mean they have to figure out the answer or that you know they can't. And I want to collaborate with people as much as I can. But what I mean by that is that there's a big culture of ownership. I mean, the idea that people want to be able to use your data, It's going to be really nice to be able to have that shared. And it's just really, And that's the way that you always compare the results. "Oh, how am I going to use my data?". We're not, we're not just like, "Oh, I'm going to do this.". I think it's, you know, I used to work in bigger tech companies and I used to be on kind of like interview panels and I would interview hundreds and hundreds of applicants for these roles. And that's a completely different culture. That's one end of the spectrum. It's like, okay, the big companies, like they're spending like 20% of engineering time or something like that hiring people, at least in the good old days when they're hiring all these people. But then when you're a smaller company, you have to spend all the time and you kind of don't want to hire even the people that you might hire at a big company because you're looking for completely different things. This is a bit of a rant, but I think hiring has like been such a journey as I've kind of built this team over the past few years. At the beginning of 2023, there was three people on the team and I think we now we're about eight. And that just took like, it just took years to kind of just. Figure out what gelled together and how, how it works. And I mean, yeah. And I just talk about my team so much just because I, yeah, I really couldn't do it by myself. And I think that finding people who get it is really hard. And so, yeah, we also have a culture of candor and like people are generally kind and that makes things easier as well. But I don't really have, there's no shortcut other than just like, it depends what you're doing. You have to kind of get the right people in the room. And you just have to find people who. Get it. Yeah. I, I, I wish I had a better, like kind of punched my answer for you.
Nicholas: Yeah, no, no, no, no, no. Probably for the YouTube short. Uh, one thing I noticed is like, uh, I reflect a lot on, uh, Dan Romero's, uh, tweets and casts, like, uh, with hiring a job description, you know, they're very focused on, I think they're, they represent a certain kind of hiring strategy where it's, we're going to hire extremely experienced people who are all like full stack, independent contributors who can be fully responsible. And then there's other people who I've talked to you who say, no, it's actually great to hire people who are, I spoke to someone at Farcon last week who was saying, no, the best thing you can do is hire someone who's awesome and doesn't know how awesome they are yet because they can become like the perfect fit for your organization. Um, if you're able to kind of, I guess, uh, advise them correctly, they can become the exact kind of person that you need because they aren't rigid or stuck in any, any ways. There's a variety of opinions on what kind of person, uh, and I imagine it depends also on the organization. And sort of what the vibe is internally, maybe a good fit at a certain org would not be a good fit at another org. Of course, I'm curious in your experience, do you find that ultimately like, um, finding people who are more experienced, it has been, uh, more important to creating like a team that can ship fast or, uh, or do you, uh, bring on people who are more junior and then have them kind of evolve into the role over time? Where have you seen more success?
Luke Miles: It's really not a one size fits all answer. But what I will say is. I have found some success hiring people earlier in their career, but it hasn't really worked when it's their first job, uh, or something like that. I think it's more like it's their second or third job and they kind of know kind of what they're looking for and how they can contribute on a team. It's really fun. Maybe one of the most rewarding things about leading a team is watching people grow and just like get better at their job, uh, year over year or month over month. I, I think I'm probably. Closer to the dam or mayor or forecaster thing, because I don't have a lot of time to mentor people like with ownership and autonomy kind of means. you've just set up a, uh, you have to set up an environment where people can ask questions and be wrong. But also you have to set up an environment where there doesn't need to be a lot of handholding. There's really not a one size fits all answer because it really depends at the end of the day of what, what is the problem you're trying to solve? Right. And if there's, you know, I mean, like what's the level of technical rigor your team needs or something like that? Um, because. I think a lot of people like to think that they need deeply, deeply technical people, but maybe they don't. And I think, um, for us, it's, it's always just been a thing where. I kind of follow more of the like startup advice for people. Uh, yeah, like I'm looking for generalists. So I'm looking for people who can like wear many hats and it doesn't mean that you're great at everything, but you kind of, people do spike at a couple of things. And so that's also kind of assembling a team, which is just like, oh, okay. Like this person is really great at like. Kind of making these animations quickly. This person knows like how to write like really good database code. And so it's kind of like identifying how to like, kind of get a group of contributors around who can really spike at certain areas, but then kind of are excited about being a startup and can, you know, Hey, I need you to like update the copy on this page. And I know you don't like, you only touch the database usually, but like, can you just do that? And like, yeah, like, and that's kind of like that sort of flexibility is always nice again. I wish I had a really simple answer. It's just so hard.
Nicholas: Yeah, no, it's not, it's not a simple. A question really, um, perhaps the most annoying question I'll ask you today. Do you have any reservations or thoughts? or how did you prepare for the legal element of something like rug dot fun or me market? Do you just throw caution to the wind and just do it? And we say meme coins are, are legit. Or do you think about that when designing products like this?
Luke Miles: Oh, yeah, it's absolutely something we think about. I kind of can't go into the specifics. I'm like. Like a public conversation like this, but you know, they're, you know, we're hooked into the lawyers, the, we, we get legal advice. They, you know, help us like make determinations. Um, and like, there's kind of like a, you know, there's very various things you need to make sure you're doing. Like, you know, if you really don't want to have your website be available in like certain countries and things like that, uh, that can be very problematic. Um, but then, you know, there's kind of the securities or the, you know, regulatory. Uh, sec angle and yeah, I mean, it's, it's a lot to consider. It's something that I, I take seriously and something that I do spend time working on. It's it sometimes can be challenging to move quickly. The, the nice, the reason why I mean market or excuse me, the reason why rug fund was able to come out kind of as, as soon as it did is we did a lot of work before me market working with council to kind of figure out like what we could and couldn't do there or what we felt comfortable doing. And they're very different products, but I'm just saying we spent. Kind of getting, we, we laid a bunch of groundwork there, but yeah, I mean, honestly, like all that said, you know, it's not the best environment to be a builder in the United States because the rules are so unclear. So sometimes it just feels like you're having conversations. Well, well, you know, they could say this, so it's really just about, you know, doing enough of the right thing. So, you know, you can have a good defense, but it's, yeah, the, the, the, the thing that really is annoying about is there's just not a binary answer to that question, right? Because. Even. If. You have every intent of following every rule and regulation, there are not enough rules and regulations, or they're just not clear. So it's, you know, it's kind of a misnomer. It's like, you know, if you're asking someone, did you follow the rules? Well, it's like, well, can you point to the rules? You know? So, but yeah, we, we talked to the lawyers. Yeah.
Nicholas: Very hypothetical. Uh, yeah. Scenario running, um, your work at context has pivoted from these larger app plays like context and mint fun to these more game-like, uh, I guess on chain happenings, experiences that are tapped into like the zeitgeist at the moment, like mean market and rug fund. I'm curious what's driven this change, if it has anything to do with your personality or personal interests, uh, or your team's interests and yeah. How you think about that in terms of, um, like building a venture scale company, does it matter to, you know, yeah, it's a different modality for creation I find. So I'm curious how you've made that transition, why, and, and, and how you think it works going forward.
Luke Miles: Yeah. Um, how do I, how do I. Feel about that? I think that there is a level of like being in the arena to really craft great products. And it means being willing to put something out there that speaks to the moment or put something out there, even if you have another product or something like that, because I think there is a level of just, you have to, you have to kind of play with the material to understand it on some level. I think that's really true in crypto. Our goal isn't to be a company. We want to be a company that puts out a new product every month. Uh, it just happens that we've put out a couple of products this year. This is kind of us institutionally learning about kind of what makes sense here and what we can do and understanding how the market responds to it. Ideally we would be spending most of our time on one or two things, or hopefully just one thing. I mean, we're a really small team. We can't afford to have 10 products that wouldn't really work so well unless all 10 of the products were maybe mischief style weekly drops or something like that. Yeah. I think, I think of it more as like, you know, we're, we're ideating, we're in the arena. I think it's, it's very possible. Something like rug dot fund becomes a much bigger than it is, but you might have to start with the demo or the proof of concept to like even convince yourself of that. So that's how I view it. I think we're just exploring, um, what's possible here. And I think that these absolutely can be venture venture sized businesses, but you have to give yourself room to. To go build that. Yeah.
Nicholas: Yeah. That's very interesting to me. It seems like something like rug dot fund, what I like about it, or this change in your attitude, what intrigues me about it is that you don't seem to be limited by, uh, you know, you're doing things that don't scale in the sense that the product as it is, is not going to be a whatever trillion dollar company. But it seems like, uh, to your point, uh, maybe what you're doing in part is like building the chops by going through the process and awareness of what's happening today. To be the team that can build the trillion dollar, something related to this, that you would not have been able to see had you not built these skills and learn what you are learning by interacting with the market.
Luke Miles: Yeah, I think that's true to some extent, but I mean, I also think it's possible. something like rug dot fund could be a very large business and that's, that's why we're pursuing it. I think there's, there is a possibility there, but it's kind of just like, you know, when Facebook shipped it or Instagram ship, they didn't have ads, but you know, they were just. I think it's more like maybe another way of putting this is like, we're building games and if the games, if we can build a game with a high retention, we'll kind of, you know, zero in on that and turn on the, all the screws to make it very, very valuable. I mean, maybe a good comparison to this could be like a Zynga or something like that, where, you know, there's like, they're trying many things, many of which don't work, but you know, the couple of things that do, or, I mean, I don't really, it feels a bit. It feels a bit heretical to call it myself, like a video game designer, because I think there's so much better software video game, people who design video games are better at designing software than most software engineers, including myself. So it feels like, you know, a lot, a lot of a self-deference or self-importance to call myself a game designer, but I think maybe that's the angle we're thinking about this, which is we're building experiences in games. And I think in web three, if you can build valuable experiences in games, there is a lot of economic value.
Nicholas: But it doesn't seem like the design of rug.fun, for example, is like particularly concerned, at least today with being that site that is retentive of those tokens going forward, like the airdrop token and the rug.fun token, the loser token, both are now LP'd, but there's not like
Luke Miles: a,
Nicholas: you know, and now you're trapped in our walled garden, something, something moat around why you should come back to rug.fun. Like you're, the game is experimental and you're not overly competitive. Are you concerned about how you create a moat around it, at least in the initial iteration?
Luke Miles: Yeah, and I think maybe the way I can kind of like put a wrap on that or, you know, I mean, happy to talk about it more, but the way I think about it is like we were spending so much time with the last product trying to figure out what people do once they have a successful meme coin that it seemed really important to just help people make successful meme coins. And I think there are a lot of natural things you could do to build retention once you have proven that engine as a product and proven that to your community. So that's. I think that's the challenge for a lot of meme coins is like retention. How do you prove that meme coins are something that lasts longer than a week? And of course there are ones that do. And so what, what makes those coins popular? What makes people interested in these things for a while? And I think this is such a wide open frontier to be asking questions in product. Yeah.
Nicholas: Yeah. And I think what you're saying about just doing games in general as a kind of experimental process towards product is something that's happening across the industry. You see it with like forecaster frames, these kinds of lightweight interactions. You see it with lots of different products that have their own dapps. where it's, it's games are on-chain. games are becoming a kind of what's the Snapchat thing prelude to, to, to greater things even that these are maybe, maybe shifting away from. everybody needs to present themselves as the next open CEO, the next major product, which can kind of hamstring you into building very elaborate products that nobody ultimately wants or that take a really long time to test.
Luke Miles: I mean, another question for you, Nicholas. Nicholas, because this is something I think about sometimes is if you subtract, if you look at crypto and you look at everyone who has like stable revenue generating businesses, and then you subtract like the centralized exchanges, it kind of looks pretty shaky in terms of one person having a really stable business. I mean, Coinbase, tremendous business. You know, they're a public company. You can go look at their financials, but you know, Uniswap is really interesting, right? Because they, they've turned on fees for the first time. I believe last year. of fees going to uniswap labs the the company and i love uniswap and i want them to win and i think they have a lot of interesting ways that they're trying to do that both with like their wallet and their other um their other products. but i think that's something this industry is kind of trying to prove right now as a point like can you build compelling on-chain stuff and have a long-term business model? i think people will do it. i'm very optimistic about it. i think you know companies like uniswap probably will um but we're kind of in this moment where it's like like it's not even if you have the thing that's very retentive like uniswap as a protocol is like. you know has this high tbl. has this token can you then like turn that into a sustainable business? and i think a lot of people want to prove that you can and i'm one of them for our business too.
Nicholas: yeah rainbow uniswap metamask etc. all having a similar kind of front-end driven mechanism for fee generation on top of something that's ultimately like public goods that don't you don't? you could be using open source alternatives or talking direct to contract. yeah it is interesting. i don't know how open c is doing right now. i mean obviously not as well as we could go.
Luke Miles: look i guess yeah i guess we could go.
Nicholas: look uh um but yes you're you're right. it is even even products that have some kind of pmf around the product. the monetization for the the team is not always as obvious. another one that comes to mind is like reservoir who have moved away or are extending beyond. uh order book aggregation which was a great product that lots of people integrated. uh but dropping relay this fast maybe more trusted cross-chain swap i'm curious like yeah i don't know are nfts dead or i don't know if it. it seems like there's a lot less moment. there's a lot more momentum around meme coins and a lot less momentum around nfts right now at least as a space for opportunity there's. certainly you know i'm into the world chain blog post on zora but it doesn't feel like there's a huge amount of like exciting uh opportunity in that space and a lot of people have moved towards meme coins and towards back to where they're at right now and i think that's a towards erc20s which have i think the greatest advantage is just the liquidity around them is uh and the compatibility with things is just so much more composable than individual low liquidity nfts that have to sort of summon their own um meme uh independently. um yeah i don't know. do you how do you square this shift towards meme coins with your own? and my also uh primary initial interest in crypto being around nfts and kind of culture on chain. meme coins are culture but it's a different kind of culture.
Luke Miles: i think the way i would probably do that is. i would maybe even just think about what is getting people to want to go on chain in 2021. you had the ftx ads with the celebrities and there's this big push to get people to. you know collect media and do stuff on chain by the board apes and things like that and i think that kind of got overheated even though there's a lot in that that i really like and i'm a supporter of in terms of just like yeah like we should have. these you know composable can be traded and these are really interesting and valuable. there's a lot of beautiful art um and then kind of squaring that with today where it feels like this crypto bubble is not or not bubble excuse me this crypto run is kind of not driven by um celebrities telling people to use crypto but maybe more structural like okay we have etfs now there's you know there's a kind of more innovation but it's it's not this like retail driven. um you know go speculate on crypto maybe speculate stronger but like go collect apes. so i think that that's causing a change where it feels like the fire is coming from inside the house a little bit more but like there's still a fire and that's exciting. so i think that's kind of where i just think like maybe just the the entry point for capital is different and i'm still very excited about nfts and i think zora and mint fund and things like that are going to remain to be important and used. um but i think maybe if we just talk about where the hype is coming from it's just maybe just shifted in terms of who is talking about it.
Nicholas: right yeah that's another element i'm curious about your perspective on like. i don't see you as being brand branding self-branding your projects as being consumer crypto or these new monikers for addressing a consumer audience which have been popular the past few months at least discursively but in practice it does seem like most projects are really uh advertising to crypto natives onboarding crypto natives to try new games not onboarding people who are skeptical of crypto or who have never played with it before. instead it seems like yeah from inside the house does definitely feel like the vibe. um i guess for you is that just like this. that's the seasonal seasonally appropriate audience and you're willing to change as the market changes. or do you think um the crypto native culture is ultimately what will become mainstream culture and that's why it makes sense to focus on crypto native culture.
Luke Miles: i think it's a little bit of both. um i yeah i think i guess the closest answer is i i think i'm just a big believer in crypto native culture being dominant. but i i don't really think that that means okay let's make it hard to use or let's um try to let's not build on ramps or things like that into products. um we built on ramps into meme market. the i guess i just don't think anyone used them. yeah very little. yeah. that's actually why that one doesn't have it. um right for for me it's more just about um yeah i just like kind of understanding compelling mechanisms that a lot of people could use and i don't call our stuff consumer crypto or really think about those narratives too much because it kind of just feels like a very vc way to talk about the product as opposed to like. can we just throw a party? that's really fun and like. can the party be something that like has legs and people want to come back to? and i think that's you know. okay well if you're throwing a party who? who are you going to invite? who do we know? and it's like. well i know people who would use this today and so let's start with them. but that doesn't mean you know has to always be that i think this is also nebulous. and um yeah i don't really have a great answer other than like i. i know there's like a big appetite for people who want to play the types of games that rugged out. fun is and so i want to just build for them because there is enough to kind of do something really fun and interesting there. and i think that that's not necessarily how you build a trillion dollar company but i also think it's how you start to build one like by kind of going after these niches. you can really understand things about human psychology and human behavior that you can generalize in certain ways.
Nicholas: last question for you do you have a long-term vision that you're driving towards in particular or do you take as you say like a more iterative approach based on what's what the culture is showing you. do you have some idea of like? oh the world is going to be this way in five or ten years and we just need to figure out the steps to get there.
Luke Miles: yeah i mean i don't so i don't. i think it's a huge advantage in crypto. if you can just you know. you can just even have a one-year plan and i i think that's where where where i'm at right now or where i'm at and i think i have like a five-year thesis about the world too. it's quite simple. i i think that crypto to a lot of people is entertainment. um it's a. it's like money and investing. whether it's in robin hood or on uniswap it's people trying to find something to do with the time. that's something that i really came apparent to me. on mint.fun why would you come to mint.fun and spend a few dollars every day and spend a few dollars every day and spend a few dollars every day collecting jpegs? there's probably several reasons. one of them is maybe because you want to make money and people go and make dot fun and make money. that happens. another thing is honestly they just want something to do and there's like an appetite and i think in crypto there's so many pockets where people are looking to be entertained and it's kind of fun to give that to them. so when i think about how the world's changing i just feel like crypto is this new. it's this new medium and we are going to build compelling and entertaining and fun experiences. and that's how i think the world's changing. and i think that wasn't so obvious or apparent even a few years ago. people thought the future of crypto was you know are we going to make banks settlement easier? and maybe that happened. but i think generally enterprise crypto is not really. it's failed and what we've really seen is people doing novel stuff on a more peer-to-peer basis. you know kind of outside of the banking system but within it too. i think like usdc is a really cool example of. it's very much inside the u.s banking system but it allows a lot of new things to happen outside of it. so yeah and when i think about the products i want to work on what i want to build it's building for this world where crypto is entertainment and um people want to spend their time having fun online and on chain and i want to be a part of that
Nicholas: absolutely worm. thanks so much for coming on web3 galaxy brain sharing all this great information and learning through your building process. context mid fun me market rug fun.
Luke Miles: um yeah we covered a lot of ground. i wasn't expecting all that.
Nicholas: yeah this is a classic interview. this is one for the books.
Luke Miles: okay thanks nicholas have a good rest of your day awesome.
Nicholas: thanks so much. all right talk to you soon bye. hey thanks for listening to this episode of web3 galaxy brain. to keep up with everything web3 follow me on twitter at nicholas with four leading ends. you can find links to the topics discussed on today's episode in the show notes. feed links are available at web3galaxybrain.com. web3 galaxy brain airs live most friday afternoons at 5 p.m eastern time 2200 utc on twitter spaces. i look forward to seeing you there.
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